Johannesburg - South Africa’s anxiety about fallout from the commodity price slump and the spectre of job losses in mining saw Mineral Resources Minister Ngoako Ramatlhodi convene an urgent meeting with the industry and the unions yesterday.
Two weeks ago some of the mining companies began announcing plans to cut thousands of jobs as the prices of coal, platinum, iron ore, nickel and gold continued to slide, dimming the outlook for the crucial sector.
In the past fortnight, the industry announced as many 12 000 planned job cuts, raising the ire of the unions and the government.
Anglo American and Lonmin are among major mining companies that have set out to cut costs, a move that has raised concerns about massive job losses.
Speaking before the two-day meeting, Ramatlhodi tried to put up an optimistic face on what is essentially being seen as a crisis.
“None of us should leave this place without making commitments... This meeting is not about pointing fingers,” Ramatlhodi told reporters.
Concrete details
Even so, he offered no concrete details on how he thought the meeting should deal with the emerging crisis.
The commodity price slide comes at a time when the industry is grappling with strained labour relations as unions press for higher wages.
But in light of the difficulties facing the industry, it was evident yesterday that the industry would press ahead with measures to ride out the current turmoil.
Mike Teke, the president of the Chamber of Mines, which represents the sector, said job cuts were not something the industry took lightly.
“We are here to listen. We don’t shed jobs for the sake of shedding jobs,” Teke said ahead of the meeting yesterday.
He said the slowdown in China was a major contributor to the industry’s woes.
But for the government, job losses are a major political headache in a country with an official unemployment rate at 25 percent.
Last Thursday, Mark Cutifani, the chief executive of Anglo America, said the industry would take “the necessary action to survive in these tough times”.
Global coal prices have slid 10 percent this year, iron ore is down 46 percent, platinum is at a six-year low, while the gold price has also notched double-digit declines. This week two major gold unions rejected the final wage offers from the employers, raising the risk of a strike.
Ramatlhodi said the meeting was also going to discuss shortcomings in inter-departmental co-ordination, including delays in the issuance of operating licences.
The department and the Chamber are expected to announce the outcome of the meeting no later than Friday.
Joseph Mathunjwa, the president of the Association of Mineworkers and Construction Union (Amcu), which was behind a crippling strike in the platinum industry last year, blamed government policy for job losses and called for a paradigm shift among commodity producers.
Paradigm shift
“You cannot always treat workers as a cost, there needs to be a paradigm shift,” said Mathunjwa, who also attended the meeting.
“If (the) government has called us here to drop our R12 500 wage demand in the gold sector, it can forget it,” he said speaking on the sidelines of the meeting.
Ramatlhodi acknowledged that the government department worked in silos to the detriment of mining companies, and said this was a threat to jobs.
He said lack of co-ordination in government had led to a shutdown of 10 companies that supplied coal to power utility Eskom because of delays in the awarding of water licenses.
“I am calling for them not to shut the mines down now. I want a chance with my colleagues to find solution,” said Ramatlhodi.
Mining is South Africa’s is contested territory because of its legacy of exploitation. Amcu still accuses the industry of paying “apartheid wages”, while the industry argues that it has transformed.
Mining is South Africa’s biggest foreign currency earner. It accounts for about 18 percent of gross domestic product and 60 percent of exports. It is employs about 500 000 people.
BUSINESS REPORT